ATF Prices Cut Rs 5 per Litre to Rs 110; First Reduction Since Iran War-Driven Spike

New Delhi, July 1: State-owned oil marketing companies on Wednesday cut the price of aviation turbine fuel (ATF) by Rs 5 per litre, taking the rate in Delhi to approximately Rs 110 per litre, according to a latest price notification reported by PTI. The reduction marks the first downward revision in jet fuel prices since the West Asia crisis pushed ATF rates to a record high earlier this year, offering a measure of financial relief to domestic carriers for whom fuel accounts for the single-largest item of operating expenditure. 

The cut comes on the back of softening international crude prices over recent weeks, aided by easing geopolitical tensions following the Iran-US ceasefire framework and improved global supply expectations, PTI reported. State-run fuel retailers, including Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum, revise ATF prices on the first of each month in line with international benchmark movements and foreign exchange rates. 

The relief comes barely three weeks after a sharp upward revision. On June 9, ATF prices were raised by around 10%, with jet fuel for domestic airlines moving to Rs 115 per litre from the then-prevailing rate of Rs 104.93 per litre, as state-owned retailers simultaneously introduced a price stabilisation regime allowing domestic carriers to lock in ATF rates for up to three years, PTI had reported.  

Airlines that opted into the government-backed scheme paid Rs 115 per litre, while non-participating carriers faced market-linked rates of around Rs 142 per litre at the time. Wednesday’s cut to Rs 110 per litre effectively brings the stabilised rate below the June 9 fixed price, potentially prompting airlines to revisit their participation choices under the voluntary scheme. 

The domestic price cuts mirror a broader correction in international jet fuel markets. Spot jet fuel prices have fallen approximately 40% from their April peak, according to data through June 25 from Airlines for America, driven by weaker demand as carriers cut back on flights and a surge in US refinery output as producers moved to capitalise on elevated prices, independent oil analyst Tom Kloza told CNN.  

International jet fuel prices had roughly doubled in the early weeks of the Iran war, forcing airlines globally to pass costs on to consumers through higher fares, fewer flights and increased baggage fees. Despite the steep fall in fuel costs, however, major international carriers including Delta have signalled they have no plans to roll back fare increases. Delta CEO Ed Bastian told reporters that fares remain at the right level even as costs have declined meaningfully, with sustained high consumer demand and reduced seat availability continuing to keep ticket prices elevated through the summer travel season, CNN reported. 

• With inputs from PTI and CNN. 

Source

• https://www.ptinews.com/story/business/atf-price-cut-by-rs-5-litre-to-rs-110-on-softer-global-oil-prices/3818376